SMALL BUSINESS 

INNOVATION 

RESEARCH

DOD's Program 

Supports Weapon 

Systems, but Lacks 

Comprehensive Data 

on Technology 

Transition Outcomes

Report to Congressional Committees

December 2013

GAO-14-96

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-14-96, a report to

congressional committees

December 2013

SMALL BUSINESS INNOVATION RESEARCH

DOD’s Program Supports Weapon Systems, but 

Lacks Comprehensive Data on Technology Transition 

Outcomes

Why GAO Did This Study

To compete in the global economy, the 

United States relies heavily on 

innovation through research and 

development. The Small Business 

Innovation Development Act of 1982

initiated SBIR programs across federal 

agencies in an effort to stimulate 

innovation through small businesses. 

DOD spends over $1 billion annually to 

support SBIR awards. The Conference 

Report accompanying the National 

Defense Authorization Act for Fiscal 

Year 2013 mandated that GAO assess 

the transition of technologies 

developed through the DOD SBIR 

program. This report examines (1) 

practices the military department SBIR 

programs use to facilitate the transition

of SBIR technologies, and (2) the 

extent to which SBIR technologies are 

transitioning to DOD users, including 

major weapon system acquisition

programs. GAO reviewed SBIR 

program documentation and data. 

GAO also interviewed officials from 

DOD’s Office of Small Business 

Programs and the military departments

to determine the practices used to 

facilitate technology transition and 

assess SBIR transition outcome data. 

What GAO Recommends

GAO recommends that DOD establish 

a common definition of technology 

transition for SBIR projects, develop a

plan to track transition that will improve 

the completeness, quality, and 

reliability of transition data, and report 

to Congress its plan for meeting new 

SBIR technology transition reporting

requirements. DOD partially concurred 

with these recommendations, but cited 

challenges to improving transition data. 

GAO believes options are available to 

address the challenges.

What GAO Found

The Small Business Innovation Research (SBIR) programs within the military 

departments use a variety of practices and tools to facilitate technology 

transition—the act of passing technologies developed in the science and 

technology environment on to users such as weapon system acquisition 

programs or warfighters in the field. GAO identified some common transition 

practices and tools across SBIR programs. For example, specific initiatives, such 

as the Commercialization Readiness Program, are used by each SBIR program 

and focus resources on enhancing technology transition opportunities. Transition 

facilitators are also used by each program to provide a network of personnel who 

manage SBIR activities that support technology transition. GAO also found some 

different practices and tools used to support technology transition efforts, such as 

the Navy Transition Assistance Program, which provides consulting services and 

helps showcase SBIR projects in an effort to improve small businesses’ abilities 

to transition their projects. Transition facilitation efforts are supported by

administrative funds provided through each program’s SBIR budget and from 

other funds received from their respective military department. A recent increase 

in the amount of administrative funding that can come from SBIR budgets is 

expected to help the programs enhance their transition facilitation efforts.

GAO was unable to assess the extent of technology transition associated with 

the military department SBIR programs because comprehensive and reliable 

technology transition data for SBIR projects are not collected. Transition data

systems used by DOD provide some transition information but have significant 

gaps in coverage and data reliability concerns. The military departments have 

additional measures through which they have identified a number of successful 

technology transitions, but these efforts capture a limited amount of transition 

results. SBIR transition reporting requirements recently established by Congress

have led DOD to evaluate its options for providing transition data. GAO identified 

several challenges to attaining complete and accurate technology transition data. 

For instance, the lack of a common definition for technology transition across 

SBIR programs could cause reporting inconsistencies. Additionally, tracking 

transition can be challenging because of the sometimes lengthy period between 

SBIR project completion and transition to a DOD user. DOD initially plans to use 

transition data from Company Commercialization Reports—viewed by DOD as 

the best available source—to meet the new transition reporting requirements. 

However, SBIR officials indicated that addressing transition reporting 

requirements is a longer-term effort, and there is no specific plan including a time

line for when DOD will be able to support those requirements. Without a plan that 

establishes a time line, it is unclear how and when DOD will begin to provide the 

technology transition information expected by Congress. Although Congress did

not specify when reporting was to begin, it expects DOD to report new transitionrelated information to the Administrator of the Small Business Administration to 

meet the new reporting requirements. However, unless DOD communicates its 

plan and accompanying time line, the congressional committees to whom the 

Small Business Administration reports may be unaware of the data quality issues 

with the transition-related information DOD plans to use to support reporting in 

the near term.

View GAO-14-96. For more information, 

contact Michael J. Sullivan at (202) 512-4841

or sullivanm@gao.gov.
Page i GAO-14-96 Innovation Research

Letter 1

Background 2

Military Department SBIR Programs Use a Variety of Practices, 

Tools, and Administrative Funds to Support Technology 

Transition Efforts 6

DOD Lacks Comprehensive Data on SBIR Technology Transition 

Outcomes, but Some Transition Successes Have Been 

Identified 8

Conclusions 14

Recommendations for Executive Action 14

Agency Comments and Our Evaluation 15

Appendix I Scope and Methodology 18

Appendix II Comments from the Department of Defense 20

Appendix III GAO Contact and Staff Acknowledgments 22

Tables

Table 1: DOD Small Business Innovation Research (SBIR) 

Program Framework 3

Table 2: Fiscal Year 2012 Budget and Awards for Military 

Department Small Business Innovation Research (SBIR) 

Programs 3

Table 3: DOD Small Business Innovation Research (SBIR) 

Program Transition Data Sources Overview 9

Table 4: Examples of Transition Outcomes Reported by Military 

Department Small Business Innovation Research (SBIR) 

Programs 11

Contents
Page ii GAO-14-96 Innovation Research

Abbreviations

CCR Company Commercialization Report

DOD Department of Defense

FPDS-NG Federal Procurement Data System-Next Generation

SBIR Small Business Innovation Research

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Page 1 GAO-14-96 Innovation Research

441 G St. N.W.

Washington, DC 20548

December 20, 2013

Congressional Committees

To compete in the global economy, the United States relies heavily on 

innovation through research and development. Recognizing the potential 

for small businesses to be a source of significant innovation, Congress 

enacted the Small Business Innovation Development Act of 1982.1 The 

act established the Small Business Innovation Research (SBIR) Program 

for use by defense and civilian agencies to stimulate technological 

innovation and utilize small businesses to meet federal technology 

needs.2 The Department of Defense (DOD) has 13 SBIR program 

components (programs) and spends over $1 billion annually on SBIR 

contract awards.3

In conducting this review, we focused on the SBIR programs within the 

three military departments—Air Force, Army, and Navy—which in recent 

years have comprised about 75 percent of the total DOD SBIR program 

budget. We evaluated documentation and interviewed officials from 

DOD’s Office of Small Business Programs and the three military 

departments on processes and practices used to facilitate technology 

These programs provide DOD with opportunities to 

acquire technological innovations that can improve military capabilities 

and ensure superiority over adversaries. The conference report 

accompanying the National Defense Authorization Act for Fiscal Year 

2013 mandated that GAO assess the transition of technologies developed 

through the DOD SBIR program. This report examines (1) practices the 

military department SBIR programs use to facilitate the transition of 

technologies, and (2) the extent to which SBIR technologies are 

transitioning to DOD users, including major weapon system acquisition 

programs.

 1 Pub. L. No. 97-219. 

2 Every federal agency with a budget of $100 million or more for extramural research and 

development is required to use a portion of its budget—not less than 2.7 percent in fiscal year 2013—

to establish and operate SBIR programs.

3 The 13 DOD agencies with SBIR programs are the Army, Navy, Air Force, Missile Defense Agency, 

Defense Advanced Research Projects Agency, Chemical Biological Defense, Special Operations 

Command, Defense Threat Reduction Agency, National Geospatial-Intelligence Agency, Defense 

Logistics Agency, Defense Microelectronics Activity, Defense Health Program, and the Office of 

Secretary of Defense.
Page 2 GAO-14-96 Innovation Research

transition—the act of passing technologies developed in the science and 

technology environment on to users—and track transition outcomes. We 

reviewed information on the SBIR program structure and processes for 

selecting and managing technology projects, and the practices used to 

support the transition of SBIR technologies to DOD acquisition programs 

and other military users. In addition, we reviewed practices and data 

systems that DOD uses to track SBIR projects and their outcomes. We 

also reviewed available documentation on these practices and systems, 

and interviewed DOD officials to assess whether they provide accurate, 

reliable, and comprehensive data on the transition of technologies to 

military users. Any limitations that were identified for these data collection 

practices and data systems are discussed later in this report.

We conducted this performance audit from April 2013 to December 2013 

in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives. Please see Appendix I for 

further details on the scope and methodology used for this work.

DOD relies on its science and technology community—DOD research 

laboratories, test facilities, industry, and academia—to identify, pursue, 

and develop new technologies that address military needs. The DOD 

SBIR program is one mechanism through which DOD attempts to 

accomplish its science and technology goals and develop technologies 

that contribute to weapon systems or transition directly to warfighters for 

use in the field. Within DOD, the Office of Small Business Programs 

oversees the department’s SBIR program activities, develops policy, and 

manages program reporting. This office generally relies on the agencies, 

such as the Army, Air Force, and Navy, to oversee and execute their own 

SBIR program activities. Each agency has flexibility to tailor its SBIR 

program to meet its needs, including determining what type of research to 

pursue, which projects to fund, and how to monitor ongoing projects.

To initiate the project award process, SBIR programs work with the 

science and technology and acquisition communities to generate and 

prioritize research and development topics. These topics describe 

technical areas of interest and capability needs, which the programs use 

in their solicitations for proposals from small businesses. DOD conducts 

three solicitations each year where small businesses compete for Phase I 

Background
Page 3 GAO-14-96 Innovation Research

contract awards that are expected to respond to the needs identified in 

each topic. Once awarded, SBIR projects are managed through a threephase program structure, which is outlined in table 1.

Table 1: DOD Small Business Innovation Research (SBIR) Program Framework

Phases of SBIR

Typical project duration 

and funding Sources of funding

Phase I: Projects selected competitively based on 

scientific and technical merit, applicants’ past SBIR 

performance, and potential for commercial application. 

Focus of work conducted in this phase is on determining 

project feasibility and merit.

6 months, up to $150,000 SBIR program funding

Phase II: Expands on efforts of Phase I projects, focusing 

on technology development to prototype. In general, 

project should have confirmed interest in transition from a 

user.

2 years, up to $1 million SBIR program funding, can include 

external funding

Phase III: Referred to as commercialization; continued 

project development with goal to transition a technology 

into a commercial product or process for sale to 

government or private-sector customers. A primary goal 

for DOD commercialization is to transition technologies to 

weapon system acquisition programs and the warfighters 

in the field.

Unlimited Non-SBIR government or privatesector funding

Source: DOD.

The number of Phase I and Phase II projects varies from year to year 

based on technology needs and funding availability. Table 2 shows the 

budgets and project awards reported for the military department SBIR 

programs in fiscal year 2012.

Table 2: Fiscal Year 2012 Budget and Awards for Military Department Small 

Business Innovation Research (SBIR) Programs

Military department 

SBIR program

Budget (in 

millions)

Number of Phase I 

awards

Number of Phase II 

awards

Air Force $304.1 531 207

Army $183.6 322 200

Navy $271.3 503 279

Source: DOD Office of Small Business Programs.
Page 4 GAO-14-96 Innovation Research

We and others have previously found that DOD and its technology 

development programs, such as the SBIR program, have encountered 

challenges to transitioning their technologies to acquisition programs or 

directly to the warfighter for use in the field.4

To address SBIR technology transition challenges, DOD, the Small 

Business Administration, and Congress have established additional 

program provisions, incentives, and reporting requirements. For example, 

the Commercialization Readiness Program was initiated to accelerate the 

transition of SBIR funded technologies to Phase III, especially those that 

lead to acquisition programs and high priority military requirements, such 

as fielded systems.

For instance, in our past 

work we found several reasons why technologies may not transition, 

including insufficient maturity, inadequate demonstration or recognition by 

users of a technology’s potential, and unwillingness or inability of 

acquisition programs to fund final stages of development.

5

More recently, Congress’s reauthorization of the SBIR program in the 

National Defense Authorization Act for Fiscal Year 2012 included a 

number of measures related to technology transition efforts, including the 

following:

As part of this initiative, Congress authorized the 

military departments to use up to 1 percent of SBIR funding for 

administrative activities that facilitate transition. This funding is used to 

support program staff and contractors who provide assistance to SBIR 

awardees, including efforts to enhance networking and build relationships 

among small businesses, prime contractors, and DOD science and 

technology and acquisition communities.

 4 GAO, Defense Technology Development: Technology Transition Programs Support Military Users, 

but Opportunities Exist to Improve Measurement of Outcomes. GAO-13-286 (Washington, D.C.: Mar.

7, 2013); and Defense Technology Development: Management Process Can Be Strengthened for 

New Technology Transition Programs. GAO-05-480 (Washington, D.C.: June 17, 2005). RAND

Corporation, Improving the Department of Defense’s Small Business Innovation Research Program 

Testimony, April 26, 2007; National Research Council, An Assessment of the SBIR Program at the 

Department of Defense (Washington, D.C.: National Academies Press, 2009).

5 The National Defense Authorization Act for Fiscal Year 2006 authorized the Commercialization Pilot 

Program under the Secretary of Defense and the Secretary of each military department. Pub. L. No. 

109-163, § 252. The National Defense Authorization Act for Fiscal Year 2012 continued the program 

and renamed it the Commercialization Readiness Program. Although the program may support any 

Phase III awards, such as technology transition to commercial products, DOD is required to provide 

goals to increase the number of Phase II SBIR contracts that lead to technology transition into 

programs of record or fielded systems and to use incentives to meet those goals. Pub. L. No. 112-81, 

§ 5122(a).
Page 5 GAO-14-96 Innovation Research

• Requires DOD to set a goal to increase the number of Phase II 

contracts awarded that lead to technology transition into acquisition 

programs or fielded systems, and use incentives to encourage 

program managers and prime contractors to meet the goal.

• Requires that DOD report specific transition-related information to the 

Administrator of the Small Business Administration for inclusion in an 

annual report to designated congressional committees. This includes 

reporting the number and percentage of Phase II contracts that led to 

technology transition into acquisition programs or fielded systems, 

information on the status of each project that received funding through 

the Commercialization Readiness Program and efforts to transition 

those projects, and a description of each incentive used to meet the 

department’s transition goal.6

• Authorizes DOD to establish goals for the transition of Phase III 

technologies in subcontracting plans for contracts of $100 million or 

more, and to require prime contractors on such contracts to report the 

number and dollar amount of contracts entered into by prime 

contractors for Phase III projects.

• Sets the ceiling for discretionary technical assistance that can be 

provided annually for all Phase I and Phase II projects at $5,000 per 

project. Programs can use this funding to assist awardees in making 

technical decisions on projects, solving technical problems, 

minimizing technical risks, and commercializing projects.

• Establishes a pilot effort to allow DOD SBIR programs to use not 

more than 3 percent of their SBIR budgets for, among other things, 

program administration, technical assistance, and the implementation 

of commercialization and outreach initiatives.7

 6 The National Defense Authorization Act for Fiscal Year 2012 requires DOD to report transition 

information to the Small Business Administration’s Administrator for inclusion in an annual report to 

the Committee on Small Business of the Senate, and to the Committee on Science and the 

Committee on Small Business of the House of Representatives.

7 The percent authorized under the pilot to allow funding for administrative, oversight and contract 

processing activities—not more than 3 percent—is for commercialization and outreach initiatives that 

were not in effect until December 31, 2011; it is not associated with the 1 percent available for use 

under the Commercialization Readiness Program.
Page 6 GAO-14-96 Innovation Research

The military department SBIR programs use several management 

practices and tools to support technology transition efforts. We identified 

some common transition elements across the programs, but also found 

some differences in how each program approaches its technology 

transition efforts. The programs’ technology transition efforts are 

supported through use of administrative funds coming from their SBIR 

budgets and other funds provided by their respective military department. 

The transition facilitation practices, tools, and funds used to promote the 

transition of SBIR technologies include the following:

Early focus on transition through topic generation and project 

selection: Technology transition efforts begin with topic generation 

and project selection processes that emphasize the pursuit of projects 

for which there is a demonstrated military need and potential transition 

opportunities. To do this, the military department programs formally 

engage stakeholders from the science and technology and acquisition 

communities in generating and endorsing topics for SBIR solicitations. 

In proposing topics and selecting projects, programs have to balance 

their desire for technological innovation with meeting pressing 

warfighter needs. SBIR officials stated that projects that pursue 

incremental improvements generally are more likely to deliver the 

technical capability expected for technology transition to occur. In 

contrast, they noted that projects that focus more on “leap-forward”

technology innovations that can support future warfighting needs tend 

to require more long-term development and have greater technical 

and transition risks. DOD policy requires that at least 50 percent of 

military department topics are endorsed by the acquisition community, 

such as program executive offices. This helps ensure that the 

acquisition community is engaged with the SBIR programs and that a 

significant portion of projects are dedicated to addressing specific 

needs identified by military users.

Phase II transition initiatives: Transition-focused activities increase 

as Phase II projects progress, commensurate with an increasing 

technology maturity and understanding of a project’s potential 

opportunities for use. In particular, the military department SBIR 

programs target transition opportunities through their 

Commercialization Readiness Programs and other initiatives that 

provide additional support to select Phase II projects. In some cases, 

the SBIR programs require formal technology transition agreements 

or matching funding as a condition to receiving additional Phase II 

funding. Technology transition agreements, which Air Force and Navy 

officials reported using, help manage project expectations and 

formalize stakeholder commitments by outlining cost, schedule, and 

Military Department 

SBIR Programs

Use a Variety of 

Practices, Tools,

and Administrative 

Funds to Support 

Technology

Transition Efforts
Page 7 GAO-14-96 Innovation Research

performance expectations for transition to occur. Matching funds from 

intended users, which are required by the Navy for some projects, can 

help create greater buy-in for transition because the intended users 

have a monetary stake in the project.

Transition facilitators: Each military department SBIR program has 

a network of transition facilitators who manage the Commercialization 

Readiness Program and other enhancement efforts, as well as 

broader SBIR activities that support technology transition. The 

facilitators are located at military labs, acquisition centers, and 

program executive offices to work directly with government 

stakeholders and help ensure projects are responsive to warfighter 

needs. They also help small businesses identify and position 

themselves for opportunities to transition their SBIR technologies. 

Although the roles and responsibilities vary somewhat across the

programs, in general, transition facilitators assist with topic generation 

and prioritization; foster communication among small businesses, 

research laboratories, and the acquisition community in support of 

transition opportunities; and monitor project progress, including 

outcomes.

Navy Transition Assistance Program: The Navy established an 

additional program over a decade ago to prepare its SBIR participants 

for technology transition opportunities. The Transition Assistance 

Program is a voluntary 11-month program with, on average, about 

two-thirds of Phase II recipients participating each year. It provides 

consulting services focused on improving the small businesses’

abilities to transition their SBIR products, including assistance in 

transition planning and developing marketing tools. Under the 

program, profiles are used to describe the expected capability, level of 

technology maturity, and potential technology transition opportunities 

for each project. These profiles are available in electronic form 

through a web-based portal called the Navy Virtual Acquisition 

Showcase, and support the annual Navy Opportunity Forum 

conference. The conference provides Transition Assistance Program 

participants with direct exposure and one-on-one opportunities to 

interact with prospective transition partners in the government and 

industry.

Other transition facilitation tools: SBIR programs also use 

technology roadmaps and formal relationship-building activities, such 

as conferences and workshops, to support transition efforts. 

Technology roadmaps are schedule-based planning documents used 

to identify opportunities for SBIR technology insertion into acquisition 

programs or direct use by the warfighter. Conferences and 
Page 8 GAO-14-96 Innovation Research

workshops, such as the annual Beyond Phase II conference hosted 

by the Office of Small Business Programs, are used by the programs 

to provide opportunities for SBIR Phase II companies to interact 

directly with prospective government and industry users and 

showcase their projects.

Administrative funds: The technology transition practices and tools 

used by the programs are supported by administrative funds provided 

through their SBIR budgets as well as non-SBIR sources from their 

respective agencies. The Commercialization Readiness Program and 

discretionary technical assistance provisions enable programs to use 

portions of their SBIR budgets to fund administrative activities, 

including transition support. For fiscal year 2012, this funding totaled 

about $12 million across the three military departments. The fiscal 

year 2012 SBIR reauthorization included a new provision—which 

DOD officials advocated—that allows the programs to use up to 3 

percent of their funds to support administrative activities, which is in 

addition to funds available through the Commercialization Readiness 

Program and discretionary technical assistance. SBIR officials stated 

that although this additional funding allowance is in the initial stages of 

being used, they believe these funds will help enhance transition 

facilitation measures for their programs going forward. Additional 

agency funding outside of the SBIR budget is also used to manage 

programs and support transition activities, but the amount of such 

funding is not readily identifiable because the military departments do 

not all require that the amount of funding used to support associated 

administrative efforts be documented.

We were unable to assess the extent of technology transition associated 

with the military department SBIR programs because comprehensive and 

reliable technology transition data are not collected. Tracking 

mechanisms used by DOD—Company Commercialization Reports (CCR) 

and the Federal Procurement Data System-Next Generation (FPDSNG)—provide some information on SBIR Phase III activities, but these 

mechanisms have significant gaps in coverage and data reliability 

concerns that limit their transition tracking capabilities. The military 

departments have additional measures through which they have identified 

a number of successful SBIR transitions to DOD acquisition programs 

and directly to fielded systems, but these efforts capture a limited amount 

of transition information. DOD is assessing how to comply with the new 

transition reporting requirements directed by Congress, but has yet to 

develop a plan that will support identification and annual reporting of the 

DOD Lacks 

Comprehensive Data 

on SBIR Technology 

Transition Outcomes, 

but Some Transition 

Successes Have 

Been Identified
Page 9 GAO-14-96 Innovation Research

extent to which SBIR technologies transition to DOD acquisition programs 

or to fielded systems.

The military department SBIR programs rely, to varying degrees, on two 

data systems—CCR and FPDS-NG—as well as their own agency-specific 

data collection activities to identify transition results. Table 3 more fully 

describes the data sources used and their limitations.

Table 3: DOD Small Business Innovation Research (SBIR) Program Transition Data Sources Overview

Transition data 

source Description Data limitations

Company 

Commercialization 

Reports (CCR)

• DOD SBIR database used to capture sales 

resulting from, and investments associated with, 

Phase III awards (non-SBIR funds), including 

DOD-specific commercialization

• Reported commercialization results used by 

SBIR program management when evaluating 

future awards to previous SBIR participants (i.e., 

as a gauge of a firm’s ability to commercialize 

products)

• Do not capture all commercialization data. Only 

small businesses seeking additional SBIR 

awards are requested to report Phase III 

commercialization; data for past SBIR 

participants that do not pursue new awards is 

limited.

• Self-reported data poses reliability and 

completeness challenges because of the 

potential for misreporting.

• Collection of data on the specific military user of 

the technology is inconsistent, at best. Specific 

users include acquisition programs, such as the 

F-35 Joint Strike Fighter.

Federal Procurement 

Data System-Next 

Generation (FPDS-NG)

• FPDS-NG is the primary government-wide 

contracting database that provides information 

on all government contracting actions

• Includes a data field through which contracting 

officers can identify contracts with SBIR 

associations

• Can be used to identify Phase III 

commercialization awards

• Does not capture all commercialization data; 

limited to government contracts.

• Not designed to provide commercialization data 

for subcontracting between a prime contractor 

and a SBIR recipient; DOD officials indicated 

this type of commercialization is prevalent.

• Contract miscoding of SBIR lineage can cause 

over- or under-reported commercialization 

results; DOD officials indicated that contracting 

officers have challenges in correctly coding 

contracts, including contracts sometimes being 

wrongly associated with SBIR as well as 

contracts failing to be acknowledged as SBIRrelated.

• Does not directly collect data on the specific 

military user of the technology. Specific users 

include acquisition programs, such as the F-35 

Joint Strike Fighter.

SBIR Programs Use 

Three Resources to 

Identify Transition Results, 

but Each Has Inherent 

Data Limitations
Page 10 GAO-14-96 Innovation Research

Transition data 

source Description Data limitations

Agency-specific SBIR 

transition 

documentation activities

• To varying degrees, military department 

programs track status and completion of SBIR 

projects via internal management systems and 

input from transition agents, users, and small 

businesses

• Programs also collect success stories for a 

select amount of projects and make them 

available using tools such as annual reports and 

web-accessible databases

• Do not capture all commercialization data; SBIR 

programs tend to track subsets of Phase II 

projects, such as Commercialization Readiness 

Program and Phase II Enhancement projects.

• Used to corroborate results from CCR or FPDSNG, and potentially identify commercialization 

not captured through data systems (e.g., 

subcontract awards).

• Tracing SBIR lineage to technologies is a stated 

challenge because it is resource-intensive and 

technologies evolve over time.

• Data collection is somewhat ad hoc and internal 

tracking tool use is varied.

Source: GAO analysis; DOD SBIR program documentation.

Although the CCR and FPDS-NG data systems do not capture complete 

data on the transition of SBIR technologies, they do provide high-level 

commercialization information that the SBIR programs use to track 

progress in achieving program goals. Because the data help support 

program management efforts, the Office of Small Business Programs and 

the military departments, to varying degrees, take steps to verify the 

quality of CCR and FPDS-NG data. For example, the Army assesses and 

validates CCR data for its projects on an ongoing basis. This process 

involves comparing recent updates to the database with FPDS-NG 

contract data and internal Army tracking data to confirm the accuracy of 

commercialization funding reported by the small businesses. The Navy 

SBIR program uses FPDS-NG as its primary source of commercialization 

data and employs similar validation techniques to improve the accuracy of 

commercialization data tracked through this system. By comparing 

contracts in FPDS-NG flagged as SBIR-related to DOD contract 

management systems, the Navy is able to verify the accuracy of Phase III 

awards data tied to government contracts. Both the Army and Navy 

officials acknowledged, however, that even with their data validation 

efforts, problems persist because of the limitations of the Company 

Commercialization Reports and FPDS-NG.

The military department programs have developed some internal 

capabilities to track certain projects and provide insight into the types of 

capabilities enabled by them. Like Company Commercialization Reports 

and FPDS-NG, these capabilities do not provide comprehensive transition 

information, but may help the departments to gain more insight into 

transition outcomes for some technologies developed within SBIR 

programs and to respond to DOD and congressional inquiries about 
Page 11 GAO-14-96 Innovation Research

program results. In particular, the programs identify transition success 

stories for a limited number of projects, ranging from Phase III awards for 

additional research and development to transition to major acquisition 

programs or fielded systems. Information on these success stories can 

come from SBIR program officials, acquisition program officials, prime 

contractors, or directly from the small businesses. The Air Force’s 

database of identified transition successes includes 95 transition stories 

dating back to 2004. The Army’s program produces an annual report 

describing transition outcomes for 20-30 successful projects. The Navy’s 

program maintains a searchable database of SBIR projects that includes 

profiles on select transitioned projects as well. Table 4 provides examples 

of transition outcomes for projects identified through our review of these 

reporting mechanisms.

Table 4: Examples of Transition Outcomes Reported by Military Department Small Business Innovation Research (SBIR) 

Programs 

SBIR program Project descriptions

Air Force • Wideband low-profile antenna transitioned to the Sand Dragon unmanned air system to provide detection 

and identification capabilities for various concealed targets (e.g., foliage canopies or camouflage nets). A 

Phase III contract was received to develop various other radio frequency systems using technology 

developed under this SBIR project.

• Web-based software application toolkit that efficiently collects, assesses, and analyzes text-based 

intelligence information, thereby reducing the burden placed on an analyst who reviews intelligence 

information. A Phase III award was provided by the Air Force through the Rapid Innovation Fund to develop 

this application further.

Army • Structural health monitoring system received Phase III award for further testing with Black Hawk helicopters 

and other rotorcraft applications. System uses sensors to assess structural damage, such as fatigue 

cracks, identifies damage in inaccessible areas of structures, characterizes damage growth, and provides 

an image of the damage size and orientation.

• Highly responsive and maneuverable space observation satellite system received Phase III funding from 

the National Reconnaissance Office for system advancement of sensors and information processes. 

System can provide Army and other agencies with control of space resources and immediate, real-time 

access to the collected data at low-cost and low risk.

Navy • Portable machine that uses a hydraulic system to attach arresting gear cable terminals on aircraft carriers 

transitioned to a Navy acquisition program office for further shipboard testing. This machine significantly 

reduces required labor and eliminates inconsistencies when compared to the current process used to 

attach wire rope terminals on aircraft carriers.

• Wireless handheld maintenance technology that provides on-demand logistics and maintenance 

information to shipboard and supporting personnel transitioned to both the Navy and Army. The device 

enhances productivity, reduces manning requirements, and supports combat readiness and operational 

effectiveness. 

Source: GAO analysis; military department SBIR programs documentation.

SBIR program officials within the military departments emphasized that, in 

addition to their broader program efforts to identify transition outcomes, 

some acquisition organizations have implemented their own practices to 
Page 12 GAO-14-96 Innovation Research

track transition. For example, the Navy Program Executive Office for 

Submarines tracks the transition of SBIR technologies to its acquisition 

programs by managing a list of companies, the value of contract awards, 

the specific program office associated with each contract award, and the 

SBIR technology associated with the award. The office indicated that 20 

active Phase III awards associated with its acquisition program efforts are 

being tracked.

The National Defense Authorization Act for Fiscal Year 2012 mandated 

that DOD report new transition-related information to the Administrator of 

the Small Business Administration who will report this information 

annually to designated congressional committees. This reporting will 

include information on the number and percentage of Phase II projects 

that transition into acquisition programs or to fielded systems, the efficacy 

of steps taken by DOD to increase the number of transitioned projects, 

and additional information specific to the transition of projects funded 

through Commercialization Readiness Programs. In order to provide 

more complete and accurate transition data to support the new reporting 

requirements, DOD recognizes it may need to modify its existing data 

systems or develop new tools to better capture the transition results for 

SBIR projects.

According to the Office of Small Business Programs, DOD’s response to 

the new reporting requirements is still being evaluated, in part because 

there are several challenges to compiling complete and accurate 

technology transition data. One such challenge we found was variation 

across the military departments in their definitions of technology 

transition. Specifically, transition definitions ranged from any 

commercialization dollars applied to a project, to only when a technology 

is actually incorporated into a weapon system or in direct use by the 

warfighter. The Office of Small Business Programs acknowledged that a 

standard DOD SBIR definition of technology transition must be ensured 

before the congressionally-required reporting begins. Standards for 

internal control state that management should establish procedures to 

ensure that it is able to achieve its objectives, such as being able to 

compile and report consistent, complete, and accurate data.8

 8 GAO, Standards for Internal Control in the Federal Government.

Additionally, 

according to SBIR officials, tracking transition outcomes can be 

GAO/AIMD-00-21.3.1 (Washington,

D.C.: Nov. 1, 1999).

DOD Is in the Early 

Stages of Developing 

a Plan to Improve 

Technology Transition 

Tracking and Reporting
Page 13 GAO-14-96 Innovation Research

challenging because the sometimes lengthy period between SBIR project 

completion and transition to a DOD user can obscure a project’s SBIR 

linkages. Time lags can occur because of delays in transition funding 

availability, additional development or testing needs before transition, or 

schedule delays encountered by intended users. During the time between 

project completion and transition, personnel associated with projects may 

change and technologies may evolve. This increases the likelihood that 

transitions associated with SBIR technologies go unacknowledged. SBIR 

officials within the military departments also stated that limited resources 

for administrative activities constrain their ability to effectively follow up on 

the transition outcomes for completed projects.

Although the Office of Small Business Programs acknowledges the 

limitations of CCR data, the initial plan is to use this data source—viewed 

by DOD as the best available—as the primary means for beginning to 

address the new transition reporting requirements. Additionally, in an 

effort to improve DOD’s future technology transition reporting and its 

understanding of transition results in general, the Office of Small 

Business Programs has initiated an assessment of different options for 

enhancing transition data. For example, as part of this assessment, DOD 

is examining whether CCR could be modified to improve reporting. 

Additionally, existing DOD reporting mechanisms, such as Selected 

Acquisition Reports—annually required for major defense acquisition 

programs—are being considered as potential vehicles for supporting 

SBIR technology transition reporting. Opportunities to build more SBIR 

awareness directly into acquisition activities are being considered as well, 

such as including provisions in acquisition strategy documents or formal 

program reviews. According to the Office of Small Business Programs, 

DOD intends to issue a policy directive in fiscal year 2014 that will provide 

guidance for implementing overall SBIR program requirements. However, 

SBIR officials indicated that addressing technology transition reporting 

requirements is viewed as a longer-term effort because of the challenges 

we have discussed, and no specific plan including a time line has been 

established for when DOD will be able to support those requirements. 

Without a plan that establishes a time line, it is unclear how and when 

DOD will begin to provide the technology transition information expected 

by Congress. Although Congress did not specify when reporting was to 

begin, it expects DOD to report new transition-related information to the 

Administrator of the Small Business Administration to meet the National 

Defense Authorization Act for Fiscal Year 2012 requirement. However, as 

stated above, DOD expects this to be a longer-term effort and designated 

congressional committees may not be aware of when DOD will likely have 

developed the capability to provide comprehensive and accurate data. 
Page 14 GAO-14-96 Innovation Research

Further, unless DOD communicates its plan and accompanying time line, 

these committees may be unaware that the transition-related information 

DOD plans to provide in the near-term to address the National Defense 

Authorization Act for Fiscal Year 2012 requirements has data quality 

issues. Standards for internal control emphasize the need for federal 

agencies to establish plans to help ensure goals and objectives can be 

met, including compliance with applicable laws and regulations. Further, 

communicating internal control efforts on a timely basis to external 

stakeholders, such as congressional committees, helps ensure that 

effective oversight can take place.9

The SBIR program efforts within DOD provide opportunities for small 

businesses to develop new technologies that may improve current U.S. 

military capabilities and provide innovative solutions to address future 

needs of the warfighter. However, information on technology transition 

outcomes for SBIR projects is limited. Consequently, DOD cannot identify 

the extent to which the program is supporting military users. The Office of 

Small Business Programs is taking steps to respond to new technology 

transition reporting requirements, but has not yet determined how and 

when it will more completely and reliably track and report on the extent of 

transition for SBIR technologies. While initial reporting efforts are 

expected to use existing data systems, such as CCR, DOD will need to 

overcome the inherent limitations of data collected through those systems 

if it expects to provide a comprehensive picture of transition outcomes.

To improve tracking and reporting of technology transition outcomes for 

SBIR projects, we recommend that the Secretary of Defense direct the 

Office of Small Business Programs to take the following three actions:

1. Establish a common definition of technology transition for all SBIR 

projects to support annual reporting requirements;

2. Develop a plan to meet new technology transition reporting 

requirements that will improve the completeness, quality, and 

reliability of SBIR transition data; and

3. Report to Congress on the department’s plan for meeting the new 

SBIR reporting requirements set forth in the program’s fiscal year 

 9 GAO/AIMD-00-21.3.1.

Conclusions

Recommendations for 

Executive Action
Page 15 GAO-14-96 Innovation Research

2012 reauthorization, including the specific steps for improving the 

technology transition data.

We provided a copy of a draft of this report to DOD for review and 

comment. Written comments from the department are included in 

appendix II of this report. 

DOD partially concurred with our recommendations. In its response, DOD 

stated that it has established a working group that is currently working 

with all stakeholders to develop a common definition of technology 

transition for all SBIR projects. DOD also agreed that it is important to 

improve the completeness, quality, and reliability of SBIR transition data, 

but noted that it has significant concerns related to the difficulty in actually 

capturing the data. The department indicated that the full scope of data 

collection challenges and associated resource needs is unknown at this 

time. 

While we recognize there are challenges to improving transition data, we 

believe there are avenues already available that DOD could pursue to 

improve transition data that may not require extensive resource 

commitments. For example, DOD’s SBIR program could work more 

closely with its acquisition community to track transition outcomes. As 

outlined in this report, some acquisition organizations have developed 

their own practices to track transition outcomes, which the program may

be able to leverage for use on a broader scale. In addition, DOD could 

consider greater use of contracting provisions to require contractors to

report on SBIR project activities, or use existing program reporting 

mechanisms, such as Selected Acquisition Reports, to capture additional 

transition information. 

We believe that collection of better data is not only needed to support the 

congressional reporting requirements, but also to help DOD assess the 

efficacy of existing transition efforts and the benefits the program yields 

for the warfighter. DOD stated it will continue with initiatives that seek to 

improve the collection of SBIR technology transition data. However, it did 

not specify if or when it intends to develop a plan for meeting the 

transition reporting requirements. We continue to believe a plan that 

includes a time line for when DOD will begin to support reporting

requirements should be provided to the designated congressional 

committees in the near term to make clear the limitations of reported 

transition data and the department’s approach to improving the data over 

time.

Agency Comments 

and Our Evaluation
Page 16 GAO-14-96 Innovation Research

We are sending copies of this report to appropriate congressional 

committees and the Secretary of Defense. In addition, this report will be 

available at no charge on the GAO website at http://www.gao.gov. If you 

or your staff have any questions concerning this report, please contact 

me at (202) 512-4841 or by email at sullivanm@gao.gov. Contact points 

for our Offices of Congressional Relations and Public Affairs may be 

found on the last page of this report. Key contributors to this report are 

listed in appendix III.

Michael J. Sullivan

Director, Acquisition and Sourcing Management
Page 17 GAO-14-96 Innovation Research

List of Committees

The Honorable Carl Levin

Chairman

The Honorable James Inhofe

Ranking Member

Committee on Armed Services

United States Senate

The Honorable Richard Durbin

Chairman

The Honorable Thad Cochran

Ranking Member

Subcommittee on Defense

Committee on Appropriations

United States Senate

The Honorable Howard McKeon

Chairman

The Honorable Adam Smith

Ranking Member

Committee on Armed Services

House of Representatives

The Honorable Rodney Frelinghuysen

Chairman

The Honorable Pete Visclosky

Ranking Member

Subcommittee on Defense

Committee on Appropriations

House of Representatives
Appendix I: Scope and Methodology

Page 18 GAO-14-96 Innovation Research

To identify what processes are used by the Department of Defense 

(DOD) to facilitate transition for Small Business Innovation Research 

(SBIR) technologies, we reviewed prior reports by GAO, DOD and other 

organizations, such as the National Research Council and the Rand 

Corporation, as well as reviewed DOD policies, procedures, and funding 

information. Using this information, we scoped our work to focus on the 

SBIR activities conducted by the Air Force, Army, and Navy. These three 

organizations typically receive about three-fourths of the annual SBIR 

funding that supports the 13 participating DOD organizations. With the 

military department SBIR programs as our focus, we interviewed DOD 

officials from the Office of Small Business Programs and the SBIR 

program offices at the Air Force, Army, and Navy on practices and tools 

used to facilitate technology transition. In addition, we interviewed and 

collected documentation from DOD officials within the acquisition 

community concerning their use of and interactions with the SBIR 

program. Specifically, we interacted with officials at the Air Force Life 

Cycle Management Center and Air Force Research Laboratory; the Army 

Aviation and Missile, Research, Development, and Engineering Center; 

the Naval Sea Systems Command; and the F-35 Joint Program Office. 

This included interviewing SBIR program management and transition 

facilitation personnel at each location, as applicable.

Similarly, to assess the extent to which SBIR technologies are 

transitioning to DOD users, we met with officials in the Office of Small 

Business Programs, military department SBIR program offices, and the 

aforementioned military acquisition organizations to discuss what data are 

available to measure transition of SBIR technologies to acquisition 

programs, or directly to warfighters in the field. We determined that DOD 

uses two primary data systems—Company Commercialization Reports 

and the Federal Procurement Data System-Next Generation. We 

discussed with DOD officials what data are collected by these systems, 

how the data are validated and used, and whether there are limitations to 

the data collected. We also reviewed available documentation on the 

systems. In assessing data limitations, we discussed with SBIR officials 

whether the systems provide accurate, reliable, and comprehensive data 

on SBIR projects that transition to military users. In addition, we 

interviewed military department officials about other data collection 

practices they may have implemented to track SBIR projects and results. 

Any limitations that were identified for the data collection practices and 

data systems used to identify technology transition outcomes for SBIR 

projects are discussed in this report.

Appendix I: Scope and Methodology
Appendix I: Scope and Methodology

Page 19 GAO-14-96 Innovation Research

We conducted this performance audit from April 2013 to December 2013 

in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.
Appendix II: Comments from the

Department of Defense

Page 20 GAO-14-96 Innovation Research

Appendix II: Comments from the

Department of Defense
Appendix II: Comments from the

Department of Defense

Page 21 GAO-14-96 Innovation Research
Appendix III: GAO Contact and Staff 

Acknowledgments

Page 22 GAO-14-96 Innovation Research

Michael J. Sullivan, (202) 512-4841, sullivanm@gao.gov

In addition to the contact named above, John Oppenheim, Assistant 

Director; Danielle Greene; Victoria Klepacz; Sean Merrill; Scott Purdy; 

and Sylvia Schatz also made key contributions to the report.

Appendix III: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(121126)
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